Are hybrid work schedules increasing traffic at suburban open-air centers?
In the last six months of 2022, visits to LA Fitness gyms in the Houston suburbs rose between 10% and 38%, according to Placer.ai. In the 610 loop however, visits declined by 2% to 18%.
COVID cases have mostly gone away, but the hybrid work model the pandemic spawned has not. Workers on the home-and-office carousel are now the norm. In 2022, 42% of American workers were on it, according to a recent AT&T study, which also predicted the percentage would rise to 81% in 2024.
These are some of the facts put forth in a new whitepaper called “A Breath of Open-Air” from Elmsford, N.Y. based DLC, owner-operator of some 80 open-air centers in the United States. The company’s CEO and Founder, Adam Ifshin, says the volume of letters of intent the company’s been receiving in recent months and the names of strong national brands on those documents is proof that, today, people prefer shopping closer to home.
“Our society is moving from urban-based to suburban-based. Traffic in all our centers is well above what it was in 2019,” Ifshin said. “We have seen unprecedented demand for our locations from brands like Macy’s, Ulta, Dick’s, and Buckle. Gyms and medical facilities are on the rise, as well.”
DLC has received seven LOIs for two vacated Bed Bath & Beyond spaces, all of them committed to rents much higher than they would have paid just a year ago, according to Ifshin.
“Rents are definitely on the move up. There is an opportunity in open-air retail for investors that we have not seen before. We’re bullish on the fundamentals we see at the property level and are fielding a lot of interest,” Ifshin said.
The whitepaper gives four reasons why open-air locations have become more compelling to national tenants:
Lower customer acquisition costs. Costly advertising and high rates of product returns have slowed e-commerce growth and drawn direct-to-consumer brands into stores.
Multisensory experiences: Customers are making more visits to centers closer to their homes to experience goods and services.
Greater sales per visit. Shoppers spend 30-50% more per visit than online.
Omnichannel solutions. Open-air shopping centers have become essential cogs in e-commerce logistics. BOPIS is on the rise.
The current state of the economy, Ifshin believes, is driving Americans to open-air centers to find bargains in stores like Burlington, Ross Dress for Less, and TJ Maxx.
“The sun, the moon, and the stars are opening up for open-air,” he proclaimed “I never count American consumers out. They’re the most resilient there are.”